b'< INDEPENDENT AUDITORS REPORTTO THE MEMBERS OF DONACO INTERNATIONAL LIMITED KEY AUDIT MATTERSKey audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, andin forming our opinion thereon, and we do not provide a separate opinion on these matters.IMPAIRMENT ASSESSMENT OF INTANGIBLE ASSETS (NOTE 14)KEY AUDIT MATTER HOW WE ADDRESSED THE KEY AUDIT MATTERThe consolidated entity recorded aOur audit procedures included, amongst others, the following:casino licence asset of $75.1 million Assessed managements determination of the cash generating unit (CGU) and the as at 30 June 2019. The licence isCGUs carrying value.classified as an intangible asset with indefinite useful life and is subject Assessed reasonableness of cash flow forecasts by comparing the base year in the to annual impairment assessment. forecast calculation to the current periods actual results.Impairment of $186.6 million was Assessed the appropriateness of the currency used in the model. The cash flow recognised in the statement of profit orforecast is calculated in the Thai Baht (THB) and translated to the US Dollar (USD)loss and other comprehensive incomeat the valuation date, and subsequently translated into the Australian Dollar (AUD).for the year based on impairment Together with our valuation specialists, assessed reasonableness of the key assumptions assessments performed as at 31used, being revenue growth rate, discount rate, and terminal growth rate.December 2018 and 30 June 2019. Together with our valuation specialists, tested the mathematical accuracy and The impairment assessment ofcomponents of the model that supports the impairment assessment.the intangible asset is a key audit matter because of the complexity Checked the sensitivity of the impairment assessment by focusing on the discount rate.and subjectivity involved, including Evaluated the adequacy of the judgments and sources of estimation uncertainty key assumptions made. disclosures in the consolidated financial report.CONTINGENT ASSETS AND LIABILITIES (NOTE 39)KEY AUDIT MATTER HOW WE ADDRESSED THE KEY AUDIT MATTERThe consolidated entity is a party Our audit procedures, amongst others, included the following:to several ongoing legal actions both initiated by and directed Obtained a list of litigation matters and held discussions with management on the against the entity. Outcomes ofstatus and outcome of each matter up to the date of this audit report.these proceedings were uncertainReviewed all solicitors representation letters, including those received by the at 30 June 2019. component auditors of DNA Star Vegas Co., Limited.We determined this to be a key Held discussions with the component auditors of DNA Star Vegas Co., Limited to audit matter given the materialitygain understanding of the impact on the consolidated financial report. Reviewed of the amounts involved togetherconsolidated entity reporting package received.with the level of judgement required in assessing the developments Ensured completeness and accuracy of the disclosures included in the consolidated to ensure they are appropriatelyfinancial report.reflected in the financial report.DONACO INTERNATIONAL LIMITED 2019 ANNUAL REPORT 87'